Brussels woos corporate titans of fashion

Brussels is rarely considered home to Europe’s high-end fashion and luxury barons, who are more easily spotted on the streets and in the boardrooms of Milan, Paris and London.

But over the past 18 months it has become increasingly common to see such figures as Spain’s Agatha Ruiz de la Prada and Italy’s Paolo Zegna walking along the corridors of the Berlaymont, home to the European Commission.

The man responsible for luring the creative and corporate titans of fashion to the grey and bureaucratic capital of the EU is Antonio Tajani, the 59-year-old vice-president of the EU’s executive arm and commissioner for industry; as well as an Italian who sports sharp Mad Men-style suits made by a family tailor in southern Italy.

Unlike many of his peers, who traditionally paid little attention to the fashion industry, which was seen as an adjunct to the broader portfolio of decay seen among Europe’s steel sector and troubled car manufacturers, Mr Tajani decided the multibillion dollar luxury sector should become a discrete priority.

“For decades fashion was seen as the cherry on top of the cake, a small detail, not a real manufacturing area,” says Mr Tajani as he removes his Neapolitan-made navy blue Marinella tie in his spacious office on the 12th floor of the Berlaymont. “For me that approach seemed absurd. Fashion and tourism are two key sectors for Europe’s economy; they are part of the solution to the continent’s growth agenda.”

Mr Tajani’s first move upon assuming his portfolio in 2010 was to gather a prestigious group of industry participants together in Brussels to help him devise ways to fit the fashion and luxury sectors’ needs within that of his broader industrial policy plan for the EU.

It was “very Italian”, recalls Paloma Castro, a director at LVMH, the French luxury goods conglomerate. “He invited us to sit around a table for some good food and talk . . . he wanted to understand the challenges the industry was facing.”

Mr Tajani says he “wanted to send them a clear message that Brussels was open for business. I didn’t want them thinking that this institution didn’t represent them . . . I was ready to listen to their proposals, and even criticism.”

Such an approach was a first, says Michael Ward, the managing director of department store Harrods. “Tajani has opened a platform that didn’t exist before . . . now we can work together to help our industry as well as the EU to meet its broader growth targets” he says, noting they are about to sit down for the third such “high-level” round table on high-end goods.

But the real question is: are these meetings producing any concrete changes aside from good feelings? The industry’s biggest problems are vast, and often fall outside Mr Tajani’s remit.

Topping luxury executives’ concerns is the influx of counterfeit products, which are biting into luxury groups’ margins. Two other key frustrations are trade protectionism in emerging economies, which impose high taxes on high-end goods, and strict visa entry rules for non-EU citizens, whose eager consumption usually helps boost sales.

Mr Tajani admits that none of the above can be dealt with directly by his unit, but the Italian official says that he can act as spokesman for the industry within the European Commission, whose key purpose is to propose and draft legislation.

“I can go to Michel Barnier [EU internal market commissioner] and ask for his help to fight for tough intellectual property rights, I can do the same with Cecilia Malmström [EU home affairs commissioner] when it comes to improving visa issuances,” he says.

Armando Branchini, president of Altagamma says “this is the beginning of a journey. Antonio is leading the way, and the industry is behind him.”

At least some of the industry is; other insiders are less convinced.

Ralph Rieker, chief executive of German children’s shoe manufacturer Ricosta, for example, says the commission has put little emphasis on helping companies find talent. “There is a shortage of workers for our industry, I feel that we are not addressing this problem and it’s a mistake,” he says. “More needs to be done.”

Another executive, who prefers to remain anonymous, says that while he appreciates Mr Tajani’s spirit, he finds the entire exercise useless. “Despite all the talks we’ve had, Brussels remains far away from the real world,” he says. “They simply don’t get how business works.”

Mr Tajani is not offended by the criticism. He says such open expression is the only way to solve problems. Although for the time being he has little meaningful legislation to show for his work, he has managed to have luxury officially declared its own sector, as opposed to part of the textile or retail industry – in itself a radical transformation of how luxury is viewed by EU government.

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